HONG KONG / BEIJING (Reuters) – Chinese electric vehicle (EV) manufacturers listed in the U.S., Li Auto Inc, Nio Inc and Xpeng Inc plan to list in Hong Kong later this year, exploring a growing investor base close to home, said people with direct knowledge of the subject.
Each trio aims to sell at least 5% of central Asia’s expanded social capital, people said. Based on its New York market capitalization on Monday, revenue could reach $ 5 billion.
The companies have been working with sales advisers who may start as early as the middle of the year, said one person, who declined to be identified due to confidentiality restrictions.
Li Auto, Nio and Xpeng – who have raised $ 14.7 billion in U.S. markets since 2018 – declined to comment. The shares listed in the United States of the three automakers rose between 3.7% and 5.3% in the first trades.
The plans come as the trio increases capital-raising efforts to finance technology development and expand sales networks, to better compete in the world’s largest EV market, where Tesla Inc is increasing sales of its vehicles manufactured in China.
This year should be crucial for EV manufacturers to gain market share, as the industry expects sales of new energy vehicles (NEVs) in China to increase almost 40% from last year, to 1.8 million units. .
“Despite the much richer financial resources now compared to a year ago, EV start-ups still need to invest heavily in next generation technology,” said analyst Shi Ji of Haitong International. “Exploring a secondary listing much closer to your home market, if any, is a good move.”
The sale of shares in Hong Kong would also add the trio to a number of Chinese companies listed in New York seeking a presence on more local exchanges amid Chinese-American political tension.
The growing number of such listings “has improved the status of Hong Kong’s capital markets globally and has also helped issuers achieve higher ratings and raise more capital,” said Zhang Zihua, chief investment officer at Beijing Yunyi Asset.
HISTORIC
According to Hong Kong rules, a secondary listing requires at least two financial years of good regulatory compliance on another qualified exchange.
Li Auto and Xpeng went public in the United States in the middle of last year, so they are likely to sign up for Hong Kong for a dual primary listing, said three people with direct knowledge of the matter.
According to Hong Kong’s dual primary listing rules, companies are subject to the requirements of full Hong Kong scholarship and a second scholarship, but are not bound by the two-year condition.
Xpeng is also considering a third listing on the Shanghai STAR Market for companies in the new economy, two other people said.
“In the long run, it is useful for consumer-focused companies like us to connect with domestic capital markets and domestic investors,” Xpeng President Brian Gu told Reuters last week, declining to comment on any plans Hong Kong listing list.
“This is the direction in which we must pay attention.”
BEING GREEN
The Chinese government has strongly promoted NEVs – such as gasoline-electric hybrid cars powered by batteries and powered by a hydrogen fuel cell – in response to chronic air pollution, stimulating the interest of technology companies and investors.
Last month, Reuters reported that the telecommunications company Huawei Technologies Co Ltd plans to market EVs earlier this year.
China predicts that NEVs will account for 20% of its annual car sales by 2025, up from about 5% in 2020.
Domestic vehicle deliveries last year totaled 32,624 by Li Auto, 43,728 by Nio and 27,041 by Xpeng. That compared to 147,445 Tesla vehicles, industry data showed.
Reporting by Julie Zhu and Scott Murdoch in Hong Kong, Yilei Sun in Beijing; Editing by Sumeet Chatterjee and Christopher Cushing